Topic: ‫الر ِحيم‬

‫الر ْح َم ِن ه‬
‫َّللا ه‬
ِ ‫س ِم ه‬
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International Business Ethics

Group member Farooq Abdullah 04 (Leader)

M Junaid Bilal 19
Ghulam Mohiyudin 43
M Mahad Ali 12
M sarfraz 26
Malik Zafar Iqbal 4R
Khalil jabran 02
 Ethics in International Business

Introduction
Ethics refers to accepted principles of right or wrong that
govern the conduct of a person, the members of a profession,
or the actions of an organization Business ethics are the
accepted principles of right or wrong governing the conduct of
business people Ethical strategy is a strategy, or course of
action, that does not violate these accepted principles
Importance of ethics in international
business
ethics is important in international
business as it establishes a healthy and
pleasant relationship for all parties
involved. Thirdly, performing in harmony
with ethics is vital for attaining client's
attention and support and achieving a
significant competitive advantage in a
particular market segment.
When entering a foreign market,
establishing a code of ethics can build a
positive international image that results
in better business practices and profits.
Individuals that represent the venture
must be trained and measured against
the code of ethics to ensure they
embody it effectively.
Ethical Issues In International
Business
The most common ethical issues in
business
involve

• Employment practices
• Human rights
• Environmental regulations
• Corruption
• The moral obligation of multinational
companies
Employment Practices

If work conditions in a host nation are clearly

inferior to those in a multinational’s home
nation, should companies apply:
home country standards
host country standards
something in between
Human Rights
in developed countries, basic human
rights such as freedom of association,
freedom of speech, freedom of assembly,
and freedom of movement, are taken for
grantedIn other countries, these rights
may not exist
Environmental Pollution

Ethical issues arise when environmental

regulations in host nations are far
inferior to those in the home nation
Environmental questions take on added
importance because some parts of the
environment are a public good that no
one owns, but anyone can despoil The
tragedy of the commons occurs when a
resource held in common by all, but
owned by no one, is overused by
individuals, resulting in its degradation
Corruption

The U.S. Foreign Corrupt Practices Act

outlawed the practice of paying bribes to
foreign government officials in order to
gain businessThe Convention on
Combating Bribery of Foreign Public
Officials in International Business
Transactions adopted by the
Organization for Economic Cooperation
and Development (OECD), obliges
member states to make the bribery of
foreign public officials a criminal offense
Moral Obligations
Social responsibility refers to the idea
that business people should take the
social consequences of economic actions
into account when making business
decisions, and that there should be a
presumption in favor of decisions that
have both good economic and good
social consequences
Social responsibility can be supported
for its own sake simply because it is the
right way for a business to behave
Advocates argue that businesses need to
recognize their noblesse oblige
(honorable and benevolent behavior that
is the responsibility of successful
companies) and give something back to
the societies that have made their
success possible
Ethical Dilemmas
Ethical dilemmas are situations in which
there is a difficult choice to be made
between two or more options, neither
of which resolves the situation in a
manner that is consistent with
accepted ethical guidelines.
Example.

Employees often don't know what to

do if they see one of their co-workers
harassing another employee, either
mentally, sexually or physically.
Employees may worry for their jobs if
they attempt to report a superior for
harassment.
• Truth vs reality

• Short term vs Long term

• Justice vs Mercy
Other Example of Ethical Dilemmas
examples
1. Your friend is on her way out of the house for a date
and asks you if you like her dress. Do you tell her the
truth or do you keep mum?

2. At a restaurant, you see your friend’s wife engaged in

some serious flirting with another man. Do you tell your
friend and ruin his marriage or do you pretend you
never saw that?
3. Your colleague always takes
credit for your and others’ work.
Now, you have the chance to take
credit for her work. Would you do
it?

4. You are a salesperson. Are you

ethically obligated to disclose a core
weakness of your product to your
potential customer?
The Roots Of Unethical Behavior
There is no clear cut reason why managers
behave unethically
The causes of unethical behavior are
• Personal ethics
• Decision-making processes
• Leadership
• Unrealistic performance expectations
• Organizational culture
Personal ethics
refers to the ethics that a person identifies
with in respect to people and situations that
they deal with in everyday life.
Professional ethics refers to the ethics that a
person must adhere to in respect of their
interactions and business dealings in their
professional life.
Decision Making Process
People may behave unethically because
they rely on economic analysis when
making decisions and fail to ask the
relevant question:Is this decision or
action ethical?
Leadership
Leaders help to establish the culture of an
organization, and set the example that
others follow When leaders act
unethically, subordinates may act
unethically, too
Unrealistic Performance
Expectations.
When the parent company sets unrealistic
performance goals, managers may cut corners
or act in an unethical manner Organizational
culture can legitimize unethical behavior or
reinforce the need for ethical behavior
Organizational Culture
Organization culture refers to the values
and norms that are shared among
employees of an organizationIn firms
with an organization culture that does
not emphasize business culture, unethical
behavior may exist
EFFECTS OF UNETHICAL BUSINESS
PRACTICES •

• Legal problems
• Poor employee performance
• Poor company credibility
Legal problems

Businesses that act unethically in ways that

break the law may face large fines and other
penalties
Poor employee performance:
A lack of ethics within a company affects
the way employees do their job. People
can decide that because leaders can
break the rules, they can too. This can
lead them to damage the company. They
may also become discouraged or not see
the need to work hard in an unethical
environment
Poor company credibility
When a company is unethical, it affects
its reputation. Not only will the leaders
and company lose respect from
employees, they will lose credibility with
the general public as well. This can result
in reduced sales, lost customers, and
significant financial harm.
Thank you